I have attached the response I received from Mill City as well as a brief synopsis of the pertinent changes.
Salut,
Leigh McBain
My summary:
A. - AAC - nothing too much has changed except that the DD being done by Gordon Capital and First Marathon is now expected to be completed imminently with the financing to be completed by the end of August. This is a 1 month delay from what was indicated in the June 16th corporate update.
B. - Yamba Lake - this project was not really discussed in the June 16th update, except to say that no work was planned. The current update suggests that negotiations are underway to execute some form of partnership or deal with respect to this project.
C. - Lobo 3 - the June 16th update indicated that the company expected to have all of the land titles issues dealt with in July this has now been pushed out to some time by the end of August.
D. - MacDonald Mines/Cuba - this project appears to be on temporary hold until the acquisition of approx. an additional 7% (to bring MIY ownership up to 19%) has appropriate regulatory approval.
Mill City Corporate Update:
CORPORATE PROFILE AND NEAR TERM ACTIVITIES
August 1, 1998
The purpose of this profile is to describe our major properties and projects which are active and therefore, we believe, present an opportunity for those interested in small cap companies.
1. ALBERTA AEROSPACE CORPORATION
On December 3, 1997 Mill City reached an agreement with Alberta Aerospace Corporation (AAC) of Calgary to invest and advance funds to AAC to permit AAC to complete FAA certification of its Phoenix Fanjet trainer aircraft at its facility in Lakeland, Florida. AAC acquired the license to assemble and market the aircraft in late 1995 after having carried out an in-depth technical evaluation. At that time approximately US$42 million had been spent on perfecting the design by the Licensor and others, but no civilian certification had been achieved.
On May 6, 1998 AAC entered into a Letter Agreement with Gordon Capital Corporation and First Marathon Securities Ltd. of Toronto for the purpose of arranging a private placement offering of up to $10 million. The completion of the private placement offering is subject to the entering into of formal agreements and completion of due diligence by Gordon Capital and First Marathon, which process is expected to be completed by the end of July with a closing of the $10 million funding by the end of August 1998.
In light of this proposed private placement offering in AAC by Gordon Capital and First Marathon, AAC and Mill City have agreed to amend the terms and conditions of their convertible debenture to permit Mill City to advance $5 million to AAC prior to December 31, 1998. Assuming Mill City's funding and the $10 million funding to be completed by Gordon Capital and First Marathon, Mill City will have the right to convert its $5 million into common shares of AAC representing approximately 25% of the issued and outstanding shares. This combined funding will enable AAC to complete the certification of both the 2-place and 4-place versions of the Phoenix Fanjet anticipated to be complete by mid 1999 with deliveries to customers by the end of next year.
We anticipate news on a regular basis regarding the progress of AAC's financing, certification and marketing of its Phoenix Fanjet airplane in both the 2-place and 4-place configuration.
2. YAMBA LAKE PROPERTY - NORTHWEST TERRITORIES
This 152,000 acre claim block (owned 50% by Mill City) is a diamond exploration property located immediately to the north of BHP/Diamet's soon to be producing diamond mine. Previous exploration has identified numerous kimberlite pipes on the Property. The Yamba Lake Claims are currently under option and subject to ongoing discussions with other companies who have expressed an interest in becoming involved in this exciting hunt for diamonds.
3. OPTION ON LOBO 3 PROPERTY ADJACENT TO WESTERN COPPER/TECK CORP. DISCOVERY AREA
On March 5, 1998 Mill City entered into an agreement with Canarc Resources Corp. to acquire a 50% interest in the Lobo 3 property totaling 19,600 hectares (approximately 49,000 acres) adjacent to the Western Copper/Teck Corp. San Nicholas massive sulphide discovery area in Zacatecas State, Mexico. Canarc anticipates receiving title to this property by the end of August 1998 which will permit exploration to begin shortly thereafter. As Mill City is undertaking a $2 million work commitment, we anticipate news on a regular basis regarding progress on this property.
4. FLORENCIA-JOBABO REGION, EAST CENTRAL CUBA
Mill City, by virtue of its approximate 12% share ownership in MacDonald Mines Exploration Ltd. has an indirect interest in an approximate 1000 square kilometer concession owned by MacDonald, located 750 kilometers east-southeast of Havana, the capital of Cuba.
As of this date, an application is before the regulatory authorities seeking approval of a pending purchase of additional common shares which would increase Mill City's ownership of MacDonald to approximately 19%.
MacDonald has completed focused work programs on the Golden Hill, Maclama and Palo Seco-Tres Casas areas with total expenditures to date of approximately US$5 million.
MacDonald is proposing a $US1.1 million work program including 3,680 meters of diamond drilling, to test mineralized targets on the Florencia-Jobabo Concession and systematically explore the Maclama and Palo Seco-Tres Casas areas. In addition, an internal pre-feasibility study will be completed on the Golden Hill and Florencia zones. The program costs have been developed based on 3 years experience gained by MacDonald conducting exploration programs in Cuba.
The above is a brief summary of the Company's active projects and more information is available directly from Mill City by contacting us at (403) 640-0110 or through our email address, millcity@cadvision.com.
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